Big Band-Aid for Beleaguered Big Three?


My most recent entry at Presented here are the introductory paragraphs. For the rest, please visit the site.

December 11, 2008

That Mexico now produces more cars than Ontario is a sobering reminder for those employed in Ontario’s auto sector that their industry’s foothold in the province continues to decline. They can’t be encouraged by polls that The National’s Neil Macdonald cites suggesting that a lot of Americans are not averse to the demise of the Detroit Three. And while odds are Ontario premier Dalton McGuinty and Prime Minister Stephen Harper will offer some form of bailout to the automakers, many observers – and very loud members of US Congress – are simply calling it a band-aid on a problem that can’t be fixed. Many are concerned with the lack of transparency exhibited by the car companies as they ask for what is rumoured to be six billion dollars in loans. Of course, that number is just an educated guess; the companies have yet to explain how much they need or what they will do with the money. Complicating matters is that Ontario can’t afford to save the industry if the cost is too high – the province is already sitting on a $500-million deficit.

Nevertheless, calls for an auto bailout remain. In the United States, a $14-billion bailout package calmly passed through the House of Representatives and is on its way to a hostile Senate. That has kept the pressure on both McGuinty and Harper to push forward with a deal. The Globe endorses a made-in-Canada package that is distinct from its expected American counterpart and encourages companies to keep jobs in this country. The Star’s message is simple: Hurry up and get a deal done soon. A longer-term package can be proposed in January’s federal budget, the paper says. What the sources dismiss almost entirely in their coverage, however, is potential friction with the union representing those whose jobs are on the line – the Canadian Auto Workers. McGuinty has said the union “must step up to help” if any bailout is to be sold and the Globe suggests that the CAW will “face some painful decisions.” The Post’s Don Martin was more explicit, proclaiming that “Canadian workers should not be handed a tax-subsidized cheque without sacrificing some of the best pay packages around.” CAW chief Ken Lewenza is quoted in the Star as saying workers will not make further concessions, because they have already agreed to wage freezes. How far they are willing to go is an unknown. The Big Seven pay little heed to Lewenza’s remarks today, but MediaScout suggests they make some calls to the union boss.


2 Responses to “Big Band-Aid for Beleaguered Big Three?”

  1. 1 David McClelland

    I have trouble with the concept of bailing out such obviously troubled companies as the Big Three. Yes, those jobs are very important to Ontario, and I’ve known a lot of people who work for GM, but I feel we might be throwing money away by bailing them out. Detroit has been on the decline for decades, now, and there’s absolutely no indication that they know how to turn things back around. Maybe that money would be more wisely invested trying to entice new companies to establish factories in Ontario.

  2. 2 nicktaylorvaisey

    Here’s part of another story in the news today that is bad news not for Detroit, but for one of the supposedly bright lights of the auto sector:

    Toyota’s Woodstock, Ont., plant opened with a visit from Ontario Premier Dalton McGuinty, the company’s chief executive officer Katsuaki Watanabe and a robot playing O Canada on a trumpet. But Toyota will shut that factory, its other Canadian plant in Cambridge, Ont., and plants in Kentucky and California as well as one of its assembly lines at a factory in Indiana.”

    “Cuts are coming before the end of the year at the Honda Motor Co. Ltd. plant in Alliston, Ont., which will shut down for two extra days before Christmas.

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